The requirement for businesses with over 250 employees to reveal their gender pay gap announced earlier this year may have caused unease among the business community, but what happens next is more important than the many league tables that are doubtless being published on the subject following the 5 April deadline.
Under legislation introduced in 2017, all British companies, voluntary organisations and public-sector bodies with more than 250 employees had to report the difference in average hourly pay between men and women by midnight on 4 April 2018. Companies also had to provide the gap in bonus pay and reveal the percentage of men and women in each quartile of their business.
By midnight on 4 April, 3,010 companies and public-sector organisations of a total of 10,014 which had filed, had reported a pay gap. The data showed that women were being paid a median hourly rate that, on average, was 9.7% less than that given to their male colleagues.
About 1,500 large British companies have broken the law by failing to report their gender pay gap in time and could now face legal action.
But, beyond the failing of these organisations, we need to look into the available data and use this watershed to make real, transparent commitments to gender parity in the workplace.
Why is it important?
The gender pay gap issue is critical as it highlights the lack of women working in higher-paid roles and identifies to organisations where they need to focus their efforts and resources to ensure a balanced and more economically productive workforce.
There is extensive research demonstrating the economic case for mixed workforces: the global management consulting firm McKinsey estimates that eliminating the gender pay gap could add £150 billion to annual GDP by 2025. The gender pay gap has been getting lower, but at current progress rates pay parity for all employees is not expected to be achieved until 2069.
We expect that is to positively affect female talent to shift higher up the business agenda following the 5 April deadline, as companies acknowledge the business benefit of having more women in senior positions and concentrate resources on the talent pipeline.
If real change is to take place everywoman believes all businesses must adopt the following three actions:
- Maintain the new transparency, which is obliging companies to accept and take seriously the scale of the gap
- Put in place action plans; policies are important, but without implementation and accountability they are meaningless
- Address learning and development requirements to reduce the skills gap as we know this grows engagement and helps women to aspire to more senior roles.
Where do we go from here?
We have seen first-hand how learning and development tools designed specifically for women have helped companies grow engagement levels among their female employees to a higher level even than their male counterparts. As women aspire to more senior roles they become role models in their own right. In the words of the American activist Marian Wright Edelman: “You can’t be what you
I deeply believe in the power of positive female role models. Once this is addressed and we start to see real gender parity and women succeeding at every level of business, then we will reap the economic benefits that go with it.
Find the gender pay gap by sector and company size here
Karen Gill is co-founder of Everywoman, a membership organisation that champions the advancement of women in business to close the gender pay gap
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